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Ralph Raico Is Mr. Classical Liberal

by Walter Block

Recently by Walter Block: Religion and Libertarianism

Review of Raico, Ralph. 2012. Classical Liberalism and the Austrian School. Auburn, AL: The Mises Institute, 347 pages

Words are important in political economic philosophy. Indeed, it is no exaggeration to say that verbiage is all important in these fields, as they consist of nothing but utterances bandied about. He who controls them controls the dialogue, controls the debate.

Even the previous sentence, in most ways not controversial, is in one way an instance of this very contention, and very debatable. For it began with the word "he." In some quarters this is highly objectionable. The claim of the feminists is that I should have said, instead, "he or she," or "he/she," or better yet, "she or he," "she/he" and best of all, plain old "she." Perhaps, so as to have given no offense, I should have put this in the third person, "they."

To the extent they can make this stick, our friends on the left have gone a long way toward winning all the debates they have with their intellectual enemies. If the socialists can insist that we all use their language, they have won half the battle — if not more.

The trouble is, those of us who favor free enterprise, very limited government, private property rights, capitalism, etc., have been ceding all too many words to those on the other side of the aisle. It is all the more difficult to make our case if we must do so by using words demanded of us by our intellectual opponents. Capitalism no longer refers to laissez faire; it now invokes cronyism and imperialism. Leftists such as Noam Chomsky are even now trying to seize ownership of "libertarian" and John Dewey long ago made a run at "individualist."

But there is no word that has been stolen from us to a greater degree, or with more effect than "liberal." And then it has been trashed to such a degree that even the thieves have given up on it and now characterize themselves as "progressives." Surprising to many, this used to be one of our own possessions, and still is to some small degree as in "classical liberal."

We might as well call the author of the book now under review Ralph ("Mr. Liberal") Raico because he has done more than anyone else to rescue this verbiage back from its kidnappers, dust it off from the garbage they have piled up on it, and convince us that "liberal" has a long and very glorious pedigree, and, once again, thanks to him a very bright future.

Chapter 1 links (classical) liberalism to the Austrian School of economics, which makes the supposedly free enterprise Chicago School look like the pinkos they are. This essay comes to us with particularly good timing, given the yeoman work Ron Paul has recently done in promoting the work of the leading Austrians such as Mises, Hayek and Rothbard. In this breathless chapter Raico lays waste to T.W. Hutchison, Karl Popper, Milton Friedman, Karl Marx and Isaiah Berlin for either economic or philosophical errors or both. Our author is so thorough in his analysis that he even takes on Carl Menger the father of Austrian economics, for his failure to distinguish "between state and civil society, coercion and voluntarism," surely the most crucial distinction in all of political philosophy. Hayek, Austrian economics' only Nobel Prize winner, also comes in for Raico's uncompromising critical analysis, on the ground that he mistakenly rejects apriorism in economics and the role of Austrian intellectual imperialism in undermining not merely social reform but outright socialism.

In chapter 2, Liberalism True and False Raico clears away the underbrush so that we can clearly see who is a (classical) liberal and who is not. You will be sitting at the edge of your chair when you learn why it is that Richard Cobden, John Bright, Herbert Spencer, John Locke, Immanuel Kant, Lord Acton, de Jouvenel, Ludwig von Mises and the Salamancans make the cut while Bismarck, Friedrich Naumann, Karl Popper, John Rawls, Lionel Trilling, John Dewey, Arthur Schlesinger, Jr. ("New Deal hack"), and John Stuart Mill (sic!) do not. States Raico on this latter somewhat surprising case: "Mill's view tends to erase the rather critical distinction between incurring social disapproval and incurring imprisonment."

The third chapter is the best analysis I have ever seen of why intellectuals oppose true liberalism: free enterprise and the marketplace. There are no truer words said that Schumpeter's: "capitalism stands its trial before judges who have the sentence of death in their pockets," Raico tells us. What are the explanations? There is Hayek's view that this stems from honest errors, Schumpeter's emphasis on the intellectuals seeking after sinecure government employment, Mises' focus on resentment and a contempt for money making (don't ask), and Schoek's spotlight on envy. Raico takes us on an exhilarating tour of the views on this important issue, also of Murray N. Rothbard, George Stigler, Douglass C. North and Robert Higgs.

So important is Keynes in this analysis of liberalism that Raico devotes an entire chapter 4 to examining the case for considering him a member of this class. I'll give you the punchline: No. Keynes didn't try to "save capitalism," as we have been mislead to believe. If anything, this economist was closer to fascism, as the forward to the German edition of his most famous book, General Theory, amply demonstrates.

You thought that class analysis was a monopoly of the Marxists? Well, think again. In chapter 5 Raico uncovers a little known but vitally important aspect of intellectual history: liberal or libertarian class analysis. Hint: it is not based on the erroneous and misbegotten labor theory of value. There is no incompatibility let alone necessary battle between labor and capital. Rather, this type of class analysis pertains to, in a word (remember those entities? If not, check out the first paragraph of this book review, above) robbery, mainly via the tender mercies of the government. All too many people, Raico avers, even Albert O. Hirschman, misunderstand the liberal class analysis brilliantly developed by Vilfredo Pareto, Adolphe Blanqui, Francois Guizot, Augustin Thierry, Charles Comte, Charles Dunoyer, Antoine Destutt de Tracy, J.B. Say and John C. Calhoun, and radiantly brought to us by Raico.

In chapter 6 our author asks us to remove our eyes, for once in our lives, from the British liberals such as Adam Smith whose "reputation (unjustifiably ) almost blinds the sun" in the words of Murray N. Rothbard and also from his countrymen Malthus, Ricardo and Mill. Instead, Raico advices, let us cast them toward the continent, and particularly France, from whence a much more principled and rigorous liberalism emanated, in the hands of Cantillon, Turgot, Say, Bastiat, Constant, Tocqueville, along with the Spanish Salamancans. One of the main violators of this advice is the Anglophile Hayek, who is enamored of spontaneous order and rejects constructivism (the product of deliberate "contrivance and design.") But not every institution that "evolves" can be justified on libertarian/liberal grounds, for example, suttee and slavery.

I pass over a discussion of German liberalism (it is not a contradiction in terms — thanks to Eugen Richter and others) in order to more fully consider Raico's treatment of Mises' liberalism. The basic premise of this system was the private ownership of property. This might sound eminently reasonable to modern (classical) liberals, but certainly it was denied by the likes of J.S. Mill, Isaiah Berlin and John Rawls. Liberalism rejects Marxist Socialism communism; that much is clear. So is liberalism part of the right, namely fascism? Since this part of the political spectrum also defends private property (superficially, in any case), and Mises, liberalisms' greatest modern spokesman (not spokesperson) did indeed see fascism as preferable to Bolshevism, this conclusion would appear to follow as Herbert Marcuse and Claus-Dieter Krohn have charged. Not so, not so, maintains Raico: "Mises criticized and rejected Fascism on a number of crucial grounds: for its illiberal and interventionist economic program, its foreign policy based on force… and most fundamentally its u2018complete faith in the decisive power of violence' instead of rational argument."

Do I have any reservations about this superb book? Only minor ones. Raico accepts the terminology "rent seeking" as a description of one of the worst practices of statism. But why pick on innocent "rent" to depict what should be called instead, booty seeking or theft or plunder? Here is another. Raico's blanket condemnation of taking money from the state and welfare statism might be misinterpreted so as to oppose innocent people using government roads, libraries, schools, currency, etc. This of course was no part of his intention, but might have been better explained. These minor cavils aside, this is a gem of a book. I learned a lot from it, and, I expect, so will everyone else.

Let me add a personal note to this review. I have known Ralph Raico since I met him in Murray Rothbard's living room in the mid 1960s. I have learned from him, been inspired by him, and have been lucky enough to count him as a friend ever since then. I thought I well knew his views. But, still, this book of his really blew me away. Those of you who do not know Ralph as well as I do are lucky he has written this masterpiece. Here, you get Prof. Raico in a concentrated form, ranging widely and deeply over politics, economics and history. Enjoy. You are in store for a real treat.

Dr. Block [send him mail] is a professor of economics at Loyola University New Orleans, and a senior fellow of the Ludwig von Mises Institute. He is the author of Defending the Undefendable, The Case for Discrimination, Labor Economics From A Free Market Perspective, Building Blocks for Liberty, Differing Worldviews in Higher Education, and The Privatization of Roads and Highways. His latest book is Ron Paul for President in 2012: Yes to Ron Paul and Liberty.

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